Non compete with forfeited company?

[Sonix]

If a company lost it's right to do business(SDAT in MD shows the name as forfeited and no new listing since listed in Pennsylvania as a slightly new business) can they enforce non competes in Maryland?

I signed the contract more than a year ago and they never gave me a copy, it may be limited to a year anyway, but I can't find out. Are these typically a year from signing or a year from last payment?

Thanks!

 

[EliteProgrammer]

Foolishly

I foolishly signed one that was for THREE YEARS AFTER ALL SERVICES ARE COMPLETED and I had read that it all depends on the the state, the judge, and the facts of the case as to how long they can be held liable. I would ask an attorney for sure since I have very limited knowledge about the law.

Owe, one other thing for sure, the SHERMAN ACT makes it a Federal Violation to even ask you to sign one of those contracts anywhere in the United States. Many company attorneys will tell you that the company has the right to protect themselves but there is absolutly NO PLACE in the Sherman Act that allows for any company to restrain trade what so ever. So IMHO those ideas and what they call laws are something that has been put together by several states to keep a monopoly for their local companies. Keep in mind that is only my opinion but you should read the actual words in the contract. Mine said that I agree NOT to develop software in blank_area for three years after all services are completed. Not only has that actually cut me out of about one third of the software industry job market for three years but it clearly creates a monopoly for this company if I decide to abide by what I signed and do NOT develop for the entire time limit. I have one year and 10 months to go on it. That is a long time. While I currently do not have any plans to develop software in that area it chews at my gut that I could get hit in court by them if I do even if it is to go with another employer.

The sad thing is whether it is enforcible or not just the fact that if your old employer starts attacks at you and possibly even your new employer in court this will probably cost you raises, respect, references, and maybe even your new job in the end. This could in effect RUIN your entire carreer. My belief is that if they did not want you to know about it then they should of never told you about it in the first place. Otherwisw Tuff for them period. Once one person is told about it then it is NO longer a secret is it.

SHERMAN ACT LINK AT THE U.S. GOVERNMENT WEBSITE...

http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm#a1

http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm#a

EliteProgrammer

 

[Sonix]

It looks like what I want to know is what does having been forfeited by the State mean? Can they sue in Maryland since they aren't listed in SDAT? Not registering or letting a business lapse in a State has to have consequences, I would think.

 

[DStaub]

There are several issues here, from what little we know. In no particular order:

1. Is the Pennsylvania business the same business or a legal successor to the company that you signed the agreement with? If it is not, the new company may have no right to sue you, period. Just because the same people are behind the business doesn't give another entity contractual rights. Unless they acquired the rights in some manner, the only rights are those of the entity you signed with.

2. If the new company is not the same business, and the old company that you signed with is no longer in existence, you need to check the laws of the state of its incorporation to determine what rights, if any, a dissolved corporation has. In many cases, a dissolved corporation has the right to maintain a suit in its own name for some period of time after its dissolution. So, even if the company is gone, it still may be able to sue you.

3. Even if the old company has the right to sue, it may not be able to enforce the agreement if it is no longer in business. For example, in Illinois and many other states, a corporation must have a "protectible interest" in order to enforce a restrictive covenant. I would question whether a company that no longer has a business to protect can realistically expect to restrain competition. Again, the fact that the people behind the old company are still in business is irrelevant unless they or their new company legally succeeded to the rights of the old company.

4. If the company is still in business in Pennsylvania but is simply not qualified as a foreign corporation in Maryland, then you need to ask if it is not qualified in Maryland because it is not "doing business" (within the legal meaning of that term) in Maryland. If the company is not required to qualify as a foreign corporation, then it probably has the right to sue in Maryland. For example, if a Pennsylvania company that only does business in Pennsylvania pays for goods from a company in Maryland and the Maryland company fails to deliver the goods, the Maryland courts are not going to throw out a lawsuit filed by the Pennsylvania company just because it is not doing business in Maryland.

5. If the Pennsylvania company is "doing business" in Maryland and has allowed its registration as a foreign company to lapse, then there may be an issue. Most states appear to allow a foreign corporation to bring a suit after reinstating the company's qualification. That would allow the company to first reinstate its foreign corporation status and then bring the action, even if the facts giving rise to the cause of action occurred during the period that the qualification was lapsed. A few states, however, do not allow a corporation to bring an action that arose during the lapse period. I have no idea which category Maryland falls into; perhaps it is one of the minority that would bar the action.

I hope this helps.